This blog post covers the impact of emerging technologies on many of today’s business models. It is driven by the hypothetical question of “What if I use or reuse my existing 3D data to design, produce, promote or sell a product?” and addresses executives, marketers, sales representatives and public relations managers—those risk-takers and doers who make strategic decisions and decide how products can be marketed and sold to current and future clients in a new way. In this article, we will also refer to business theories and apply them to the realm of 3D, Augmented, and Virtual Reality.
Getting the job done with Augmented and Virtual Reality
In his latest book Competing Against Luck, Harvard Business School professor Clayton M. Christensen and his co-writers build their theory about innovation and customer choice on the premise that “we all have jobs we need to do that arise in our day-to-day lives and when we do, we hire products or services to get these jobs done.” Practically speaking, if you are a sales manager in a B2B company that is selling industrial gates, there are plenty of options of getting your job done. You could use print brochures to introduce a showpiece to an interested lead. Shortly after the intro you might pull out documents with technical specifications. To round out the conversation, you show a short movie to demonstrate the functionality of your product in a fun, engaging way. In return, your client might be telling you that this is more or less what he needs to get his job done – that is driving the truck smoothly into the garage, parking it safely and not thinking about any further maintenance costs or the safety of the truck while parked.
With new technologies on the rise, we can help both our sales manager and his customer to make their working lives easier. Being equipped with a tablet and an app that contains either each product of a company’s product line or a comprehensive product configurator that allows a sales representative to choose between different models, present mechanical systems in real-time and assemble the demanded product in front of the interested lead, shows that customer needs are taken seriously then and there by the organization our sales manager is representing in the field.
Together with the lead he will pick or select the product and preview it in Augmented Reality to see if it fits the conditions on-site and readjust if need be. Once he is finished with his visit, he can send out a report to the client and his own back office for documentation. It is almost a no-brainer to mention that this data can be reused for installation purposes and clarify issues before any legal actions are taken (due to wrong installation, missing mounting parts or malfunctioning).
Here is another case. Imagine you were to market properties to prospective buyers. You could perform the job by compiling all the information you want to share on a website that includes floor plans, image galleries and promotional videos. You could also advertise it on one of the many platforms that specialize in selling properties. These are two possible approaches of getting your job done as a real estate marketer.
But what if you reuse the architect’s 3D CAD model and present the future building, located in Madrid, to the family from Belgrade who is really keen on doing a virtual walk through the apartment? All they need is a tablet or a smartphone. We are not talking expensive tech that has to be newly purchased. Immersing your clients in a virtual environment that cannot be entered under normal circumstances because it is expensive, dangerous or impossible to get there or the event is so rare that it is unlikely to easily repeat it is key in getting the job done with Virtual Reality in a sensible way, which is far from being gimmicky or unsustainable.
How do AR/VR technologies affect particular building blocks in a business model?
To continue with the argument of how 3D will influence future business models I will refer to Alexander Osterwalder’s and Yves Pigneur’s widely used Business Model Canvas. The canvas helps to visualize how a company generates revenue and how a value proposition is created and delivered to specific customer groups. Value proposition and customer segments are at the heart of each and every business model. 3D data has one big advantage: as long as it sits there it cannot lose any value. Anyone in research and development, sales or marketing can use it. 3D lays the foundation of a common shared language between employees and customers. If you think about your first or next step towards digitization, start with 3D. Seriously.
Value Proposition
Meeting the needs of customers is a supreme discipline. Ask yourself “What value do we deliver to the customer?” or “Which one of our customer’s problems are we helping to solve?”. A big plus that comes with Augmented Reality is cost reduction by lessening the number of returning goods and product accessibility. Take for example a prospect customer who is trying to find out if a desired shelf fits into that small spot in her bedroom. Life-size product previews can become a substantial aiding tool in making purchase decisions. If she can access the product any time on her phone and get all the product specific information combined with the visual representation in real-time, it allows her to interact with the product before purchase and to test it upfront. Thus, playfully consuming information with the benefits of AR has the potential to lower the rate of returning goods.
In the visual-driven age of Augmented and Virtual Reality, the buying process shifts from linear buying – based on a mixture of descriptions and product visuals – to a non-linear experience where the consumer accesses and selects the desired products and adapts them to their personal circumstances. That said, virtual product demonstrations are bringing the value proposition closer than ever into the homes of potential buyers. This is an outstanding opportunity for producers to engage with customers on an emotional level that is informative and informal in its essence.
As you can see, opportunity abounds. In part two of this article, we will take a look at customer segments, distribution channels, revenue streams, and more.
About the author
Erich Renz is Director of Product Management at Vuframe, an online platform for virtual product demonstrations with Augmented and Virtual Reality, where he is investigating and driving the development of AR, VR, 3D and 360° applications for businesses and consumers.